Tax Return Date Move 'To Close Firms'

JOBS will be lost and firms will be forced to shut
down if the Government goes ahead with plans to force the self-employed
to file and pay tax next June, business lobby groups are to tell
ministers.

Some 180,000 small and medium-sized firms employ around 655,000 people.

But
forcing small firms to submit tax returns just seven months after this
year's deadline would create huge cashflow problems and force them to
reduce staff hours and cut back on the hours worked by employees, ISME
and the SFA said.

Small firms have called for transition arrangements to be put in place.

Some
600,000 people are expected to file tax returns by the end of this
month, with self-employed accounting for some 40pc of these.

Last
week's Budget was the first under new European rules demanding that all
member states have their draft budgets published by October 15 and
finalised by the end of the year.

To meet this new deadline, the
Department of Finance wants to bring the pay-and-file date forward so
that officials have all the information needed to finalise the earlier
Budget.

They have proposed either the end of June or mid-September as possible dates.

ISME
boss Mark Fielding said his group will make a submission to the
Department of Finance stressing that moving the pay and file date to
June will cause huge cashflow problems.

"Having a much earlier pay and file date will threaten the viability of many smaller firms."

He
said ISME accepted that the Government needed to have visibility about
what to expect in terms of the returns from the self-employed but this
could be achieved by setting an earlier filing date, with the tax owed
on this paid at a later date.

ISME has suggested that if firms are
forced to file and pay tax earlier that they should get a small
discount on the tax, such as a 1pc reduction in the overall bill.

FORCED

The
Small Firms Association said many of its members will be forced to cut
jobs and hours worked as this is one of the few costs they can control.

Avine McNally of the SFA said: "If this goes ahead in June, it will lead to job cuts."

She
said smaller firms were already struggling to get loans from banks, so
would be unlikely to get finance to pay their taxes earlier than usual.

The
department is proposing three options for the new pay-and-file date –
either moving it to June 30, around September 20, or another date in
September.

It said moving it to the end of June would
have advantages for both practitioners and the Revenue Commissioners, as
it would spread the work associated with filing over a longer period.

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